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ASRAWAL CHHALLANI 4 CO.,CHARTERED ACCOUNTANTS,Byramji Town,NA6PUR-440001.PH. NO. 2544250. 2544253.

AUDITORS' REPORT TO THE MEMBERS OF HALDIRAM FOObS INTEENUTIONAL LIMITED

To The Members of :

HALDIRAM FOODS INTERNATIONAL LIMITED.

Report on the accounts for the year ended on 31st March, 2005 in compliance withSection 227(2) of the Companies Act, 1956.

We have audited the attached Balance Sheet of HALDIRAM FOODSINTERNATIONAL LIMITED, as at 31* March, 2005 and also the Profit and Loss/Account for the year ended on that date annexed thereto and the Cash Flow Statementsfor the year ended on that date. These financial statements are the responsibility of theCompany's management. Our responsibility is to express an opinion on these financialstatements based on our audit.

We conducted our audit in accordance with auditing standards generally acceptedin India. Those Standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supporting theamounts and disclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that our auditprovides a reasonable basis for our opinion.

1 As required by the Companies (Auditor's Report) Order, 2003 as amended by theCompanies ( Auditor's Report ) Amendment Order, 2004, issued by the CentralGovernment of India in terms of sub-section (4A) of Section 227 of the CompaniesAct, 1956, we enclose in the Annexure a statement on the matters specified inparagraph 4 and 5 of the said Order.

2 Further to our comments in the Annexure referred to above, we report that :

(a) We have obtained all the information and explanations, which to the best ofour knowledge and belief, were necessary for the purposes of our audit;

(b) In our opinion proper books of account as required by law have been kept bythe Company so far as appears from our examination of thosj

For, Baldiram Foods International Limits*

Director

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(c) The Balance Sheet and Profit and Loss Account dealt with by this reportare in agreement with the books of accounts;

(d) In our opinion, the Balance Sheet and Profit and Loss Account dealt with bythis report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956, to the extentapplicable;

(e) On the basis of written representations received from thedirectors/companies, as at 31st March, 2005 and taken on record by theBoard of Directors, we report that none of the directors is disqualified asat 31st March, 2005 from being appointed as a director in terms of clause(g) of sub-section (1) of section 274 of the Companies Act, 1956;

(f) In our opinion and to the best of our information and according to theexplanations given to us, the said accounts give the information required bythe Companies Act, 1956, in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted inIndia:

(i) In the case of the Balance Sheet, of the state of affairs of theCompany as at 31st March, 2005;

(ii) In the case of the Profit and Loss Account, of the Profit for theyear ended on that date; and

(iii) In the case of Cash Flow Statement, of the Cash Flows for the yearended on that date.

For. A6RAWAL CHHALLANI A Co.,CHARTERED ACCOUNTANTS,

( S.R. CHHALLANI )Nagpur ^ ^^^^^^^ PARTNER.Dated J&M* July, 2CX5v0o^ M. NO. 30154.

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ASRAWAL CHHAUANI A CO..CHARTERED ACCOUNTANTS,

ANNEXURE TO THE AUDITORS' REPORT ;

[ Referred to in Paragraph 1 of our Report of even date on the Accounts for the yearended 31" March, 2005 of HALOIRAM FOODS INTERNATIONAL LIMITED ].

(i) The Company is maintaining proper records showing full particulars includingquantitative details and situation of Fixed Assets.

(ii) A substantial portion of the fixed assets have been physically verified by themanagement during the year and in our opinion the frequency of verification isreasonable having regard to the size of the Company and the nature of its assets.No material discrepancies were noticed on such physical verification.

(iii) Fixed Assets disposed off during the year were not substantial. According to theinformation and explanations given to us, we are of the opinion that the disposal offixed assets has not affected the going concern status of the Company.

(iv) The inventory has been physically verified during the year by the management. Inour opinion, the frequency of verification is reasonable.

(v) The procedures of physical verification of inventories followed by the managementare reasonable and adequate in relation to the size of the Company and the natureof its business.

(vi) In our opinion and according to the information and explanations given to us, theCompany is maintaining proper records of inventory. The discrepancies noticed onverification between physical stocks and the book records were not material andhave been properly dealt with in the books of account.

(vii) The Company has taken loans from Companies listed in the Register maintainedunder Section 301. The Number of parties is 12 and the amount involved in thetransactions is Rs. 74.98 Lacs. The Company has not granted loans to Companieslisted in the Register maintained under Section 301.

(viii) The rate of interest and other terms and conditions of the unsecured loans takenfrom Companies listed in the Register maintained under Section 301 are notprejudicial to the interest of the company. The Company has been regular inpayment of principal and interest amount. There are no over-dues.

(ix) In our opinion and according to the information and explanations given to us, thereare adequate internal control procedure commensurate with the size of theCompany and the nature of its business with regard to purchase of inventory and

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fixed assets. During the course of our audit, we have not observed any continuingfailure to correct major weaknesses in the internal controls.

(x) Based on the audit procedures applied by us and according to the information andexplanations provided by the management, we are of the opinion that there are notransactions that need to be entered into the register maintained under Section301 of the Companies Act, 1956.

(xi) In our opinion and according to the information and explanations given to us, theCompany has not taken any deposits from public as such not required to comply withthe provisions of Section 58A and 58AA of the Companies Act, 1956 and theCompanies ( Acceptance of Deposits ) Rules, 1975, with regard to depositsaccepted from the public.

(xii) In our opinion, the Company has an internal audit system commensurate with itssize and nature of its business.

(xiii) The Central Government has not prescribed the maintenance of cost records undersection 209(l)(d) of the Companies Act, 1956.

(xiv) According to the records of the Company, Provident Fund, Investor, Education andProtection Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax,Customs Duty, Excise Duty, Cess and other Material statutory dues applicable to ithave been generally regularly deposited during the year with the appropriateauthorities. According to the information and explanations given to us, noundisputed amounts payable in respect of above were in arrears, as at 31st March,2005 for a period of more than six months from the date on which they becamepayable.

(xv) According to the records of the Company, there are no disputed Sales-Tax,Income-Tax, Customs Duty, Wealth tax, Excise Duty or Cess which have not beendeposited on account of dispute.

(xvi) The Company does not have any accumulated losses at the end of the financial yearand has not incurred cash losses during the financial year covered by our audit andthe immediately preceding financial year.

(xvii) In our opinion and according to the information and explanation given to us, theCompany has not defaulted in repayment of dues to a financial institution, bank ordebenture holders.

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(xviii) Based on our examination of the records and the information and explanationsgiven to us, the Company has not granted any loans and advances on the basis ofsecurity by way of pledge of shares, debentures and other securities.

(xix) In our opinion the Company is not a chit fund or a nidhi /mutual benefitfund/society. Therefore the provisions of clause 4(xiii) of the Companies( Auditor's Report) Order, 2003 are not applicable to the Company.

(xx) In our opinion the Company is not dealing in or trading in shares, securities,debentures and other investments. Accordingly, the provisions of clause 4(xiv) ofthe Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

(xxi) In our opinion, the Company has not given guarantees for loans taken by othersfrom banks or financial institutions.

(xxii) In our opinion, the term loans have been applied for the purpose for which theywere raised. During the year no term loan is raised.

(xxiii) According to the information and explanations given to us and on an overallexamination of the balance sheet of the Company, we report that no funds raisedon short-term basis have been used for long-term investment.

(xxiv) According to the information and explanations given to us, the Company has notmade any preferential allotment of shares to parties and companies covered in theregister maintained under section 301 of the Companies Act, 1956.

(xxv) The Company has not raised any secured debentures during the year,

(xxvi) The Company has not raised any money through public issue during the year.

(xxvii) According to the information and explanations given to us, no fraud on or by theCompany has been noticed or reported during the course of our audit.

For, A6RAWAL CHHALLANI 4 Co.,CHARTERED ACCOUNTANTS,

( S.R. CHHALLANI )P^TNER.

M. NO. 30154.

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A6RAWAL CHHAUANI & CO..CHARTERED ACCOUNTANTS.BYRAMJI TOWN, NA6PUR 440 001.PH. 2544250; 2544253.

HAIDIRAM FOODS INTERNATIONAL LIMITED NAfiPUR.

BALANCE SHEETAS AT 31 ST MARCH. 2005.

I

n

i

mAabcd

PARTICULARS SCHEDULESSOURCES OF FUND :

SHAREHOLDERS' FUNDS :Share Capital. " A "Reserves & Surplus. " B "Shore Application Money.

Pending Allotment.

" I " Rs.

LOAN FUNDS :Secured Loans. " C "Unsecured Loans. " D "

" H " Rs.

DEFERRED T-* ' VOTI TTTES :

" m " RS .

TOTAL ( I TO m ) R*.

APPLICATIONS OF FUND :

FIXED ASSETS = " E "6ross Block.Less: Depreciation.Net Block.Add: Capital W-I-P. Advances & Deposits.

11 I " Rs.

INVESTMENT: " F "

" IT' Rs.

NET CURRENT ASSETS CURRENT ASSETS: LOANS A ADVANCES " 6 "

Inventory.Sundry Debtors.Cash & Bank Balances.Loans & Advances.

" A " R.

31.03.2005

17,145,000233,007,671

6,491,000

256,643.671

70,570,304143,441,282

214,011,586

48,868,437

48.868.437

519.523.694

407,628,82969,787,876

337,840,95391,277,839

429.118,792

37,400

37.400

29,615,00050,903,02440,119,81621,498,400

142.136.240

31.03.2004

16,945,000203.726,107

7,231,000

227,902.107

74,449,923100,089,050

174,538.973

19,435,032

19.435.032

421,876.112

300,538,78253,458,553

247,080,229100,491,443

347,571.672

37,400

37.400

39,490,00033,211,39529,522,43120.918,087

123.141,913

Director

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ACRAWAL CHHALLANX CO.CHARTERED ACCOUNTANTS.

31.03.2005

a Current Liabilities,b Provisions.

11 H"

11 B " Rs.

( A - B ) " m" Rs.

TOTAL ( I TO IH ) Rs.

31.03.2004

47,765,7974,002,941

51,768.737

46,808,5442,066,329

48,874.873

90.367,502 74,267,040

519.523.694 421,876,112

A6RAWAL CHHALLANI 4 CO.,CHARTERED ACCOUNTANTS.

SIGNIFICANT ACCOUNTIN6 POLICIESAND NOTES TO THE ACCOUNTS = " P "

Schedules " A " to " H " and " P " referred to above forms an integral part of the Balance Sheet.

For and on behalf of Haldiram Foods Intl. Ltd. As per our report of even date attached.

For.ASRAWALCHHAlkANIACO.,CHARTERED ACCOUNTANTS.

( RAJENORAKUMAR S. ASRAWAL )

( S.R. CHHALLANI)PARTNER.

M.NO. 30154.

for, flakJiram Foods Intentional LimiLimited

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A6RAWAL CHHALLANI A CO..CHARTERED ACCOUNTANTS.BVRAMJI TOWN, NA6PUR 440 001.PH. 2544250; 2544253.

HAtDIRAM FOODS INTERNATIONAL LIMITED. NA6PUR.

PROFIT AND LOSS ACCOUNT.FOR THE YEAR ENDED 31ST MARCH. 2005

PARTICULARSINCOME:

Soles / Income From Operation.Other Income.

EXPENDITURE :Coat Of 6oods Consumed / Sold.Payments & Benefits To Employees.Manufacturing Expenses.Other Expenses.

PROFIT BEFORE INTEREST A DEPRECIATION:Less: Interest.PROFIT BEFORE DEPRECIATION A TAX:Less ' Depreciation.PROFIT BEFORE TAX:Less: Income Tax.PROFIT AFTER TAX:Less ' Deferred Tax.

Wealth Tax.PROFIT :Add : Income Offered Under Search:

Financial Year 2004 - 05.Financial Year 2003 - 04.

PROFIT :Add : Profit Brought Forward.PROFIT :Less . APPROPRIATIONS:

Interim / Final Dividend.Dividend Tax.general Reserve.

PROFIT CARRIED FORWARD :SI6NIFICANT ACCOUNTIN6 POLICIESAND NOTES TO THE ACCOUNTS :

31.03.2008 31.03.2004

" I "J"

Rs.

" K "" L""M 1"NT

Rs.Rs." O 1Rs.

Rs.

Rs.

Rs.

Rs.

Rs.

Rs.

Rs.

" P "

710,175.2351,964,732

712.139.967

459,201,30312,279,581

127,058.37249,541,634

648.060.89164.059.076

1,959,82862.099.24916,754,290

45.344.9993,555.612

41.789.34729,433,405

12.355.942

800.000700,000

13.855.94246,172,802

60.028,744

3,389,000447,329

3,000,0006.836.329

623,666.7591,353,692

625.020.451

415,589,20010,246,645

107,977,04248,134,392

581.947.27943,073.172

2,571,91240,501.26013,535.783

26,965.4772,066,329

24,899.1488,313,569

14,13616,571,443

16.571.44336,396,93652.968.379

3,364,500431.077

3,000,0006,795,577

53,192,415 46.172.802

Schedules " J " to " P " and " Q " referred to above forms an integral part of the Profit 4 Loss Account

For and on behalf of Haldiram Foods Intl. Ltd. > As per our report of even date attached.

( RAJEKIDRAKUMAR S. A6RAWAL )

For, A6RAWALCHARTEREI

ANI 4 CO.,IOUNTANTS.

( S.R. CHHALLANI)PARTNER.

M.NO. 30154.

Food. ****

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A6RAWAL CHHALLANI A CO..CHARTERED ACCOUNTANTS.BYRAMJI TOWN, NA6PUR 440 001.PH. 2544250; 2544253.

DETAT1 5 fHEET TO BALANCE SHEET

AS AT

SCHEDULE " A "SHARE CAPITAL =

I AUTHORISED SHARE CAPITAL :5,000,000 Equity Shares of Rs. 10/-each.

Rs.

II ISSUED. SUBSCRIBED AND PAID UP SHARE CAPITAL17,14,500 Equity Shares of Rs. 10/- each fullyPaid Up in Cash.( Previous Year 16,94,500 Shares.)

TOTAL " A " Rs.

SCHEDULE " B "RESERVES AND SURPLUS :

I SECURITIES PREMIUM RESERVE :As Per Last Balance Sheet.Add: Received During The Year.

11 I " Rs

II CAPITAL SUBSIDY FROM O.I.C. :As Per Last Balance Sheet.

" II " Rs

III 6RANT FROM APEOA :As Per Last Balance Sheet.Add: Received During The Year.

11 I " Rs

IV 6ENERAL RESERVE =As Per Last Balance Sheet.Add'.Transferred For The Year.

" HI " Rs

For, Haktiram Foods International limitod

Mnotar

AND PROFIT AND LOSS ACCOUNT.

31ST MARCH. 2005.

31.03.2005 31.03.2004

50,000,000 50,000,000

50.000.000

17,145,000

17.1,45,000

80,305,0009,800,000

90,105.000

2,000,000

2,000,000

790,641

790.641

27,000,0003,000,000

30,000.000

/^(*(\qk -